Briefing: Means-testing Child Benefit

George Osborne’s removal of child benefit from high-earners kicks in on Monday, but what exactly does it entail?

Who loses what?

Initially, Osborne’s plan was ‘to remove child benefit from families with a higher rate taxpayer’, as he announced in the Spending Review of October 2010. (This year, that’d be anyone earning over £42,475.) But after criticism that this would hit too many people, and that it would create a ‘cliff-edge effect’ (whereby someone earning £42,475 would keep all their Child Benefit but someone earning £42,476 would lose it all, so the lower-earner would end up better-off), Osborne changed his mind.

In his Budget of March 2012, the Chancellor announced that only families with at least one parent earning more than £50,000 would lose out, and that the removal would be tapered. Families will lose 1 per cent for every £100 their highest-earner earns over £50,000 — up to 100 per cent for those earning £60,000-plus.

HMRC estimates that this will affect around 1.2 million families, with 70 per cent of them losing all their child benefit (because at least one parent earns £60,000 or more). Those 1.2 million families will lose an average of roughly £1,300 each per year. (Child Benefit is currently £1,056 a year for one child, and an extra £697 per additional child.)

How will it work?

Somewhat bizarrely, the affected families will actually carry on receiving Child Benefit, but will face an extra ‘income tax charge’ to reduce their net income by the appropriate amount. So a family with two children whose highest earner has an income of £60,000 will receive £1,752 in Child Benefit (as now) but will also have to pay a new tax of £1,752.

How much will it save the government?

The Treasury estimates that the change will save the government around £1.5 billion in 2013-14, rising to £2.5 billion a year by 2016-17.

Criticism 1: Unfairness

One criticism of the original plan that Osborne didn’t address with his changes is that a family where both parents earn, say, £40,000 (so the total income is £80,000) gets to keep all of its Child Benefit, whereas a lone parent earning £60,000 loses all of it. On the plus side, the policy does not hit the 85 per cent of families where both parents earn less than £50,000 at all.

Criticism 2: High marginal tax rates

The gradual reduction in Child Benefit means that families whose highest earner’s income is between £50,000 and £60,000 will effectively face much higher marginal income tax rates. At the moment, for every extra pound they earn, they keep 60p, but from Monday — if they have kids — they’ll keep less. How much less depends on how many children they have:

Robert Joyce of the Institute for Fiscal Studies has put together the below graph to show how the change will distort the income tax system, warning that this will raise the incentives for those in this band ‘to reduce their taxable income by, for example, working less or contributing more to a private pension’.

Criticism 3: Ignoring inflation

As Joyce notes, the government does not plan to raise the £50,000 and £60,000 thresholds — which has two knock-on effects. First: as wages rise, more families will find themselves losing their Child Benefit. Second, as Child Benefit rises to keep up with the cost of living, the marginal tax rates facing those in that range will rise even further.

Criticism 4: More paperwork

HMRC predicts that, as a result of the policy, an extra 500,000 people will have to fill in self assessment forms.

Criticism 5: What happened to simplifying the benefits system?

‘Perhaps the biggest concern is the incoherence it creates in the welfare system’, Joyce says. He notes that on the one hand the government is simplifying benefits by combining six means-tested benefits into one (the Universal Credit), but at the same time is turning Child Benefit into a new one. With Council Tax Benefit also becoming more complicated, Joyce warns that ‘It is unclear whether the net effect of all this will be to improve the welfare system.’

Means-testing leads to people who are actually paying for the welfare
state feeling excluded from what they are paying for. It is
counter-productive.
If we are to follow the idea of means-testing further the logical conclusion would be to start means-testing access to the NHS. Which shows the stupidity of this approach.

chan chan

Never mind any of that. Child benefit should be abolished altogether. Nobody should get it. Cut taxes instead.

Fergus Pickering

Less of my money paid out in gifts to people who already have plenty – what’s not to like? Unless you are one of those people of course

cf2012

It isn’t a “gift”, any more than any other tax relief is a “gift”.

Fergus Pickering

I thought we were talking about child benefit. It is indeed a gift of money. It comes as a cheque.

The broader point is we have a massive deficit and it needs paying off and the level of spending we are left with still needs support. Where is the money? Its not with the poor.

Only those with money come into this equation and just how its squeezed out of them it irrelevant. And of course the poor are being hit with a below inflation limit on benefit rises.
As a commentator says to LIllico, Child Benefit is not a tax allowance since its paid to non working mothers.

cf2012

No, Lillico (even in the article title) is careful to observe that it’s to those who pay tax that it’s a rebate, and it is accounted for such in the country’s accounts.

Also, as I observed earlier, I could just about stomach this “massive deficit needs paying off” stuff if the 1.2 billion supposedly gained by this move weren’t immediately outbalanced by an *increase* of 4 billion in new money to DFID. (“Well, members of the board, we’re losing money every day, and we’ve slashed salaries of single-parent employees, but we’re about to make an even larger donation to charity! We ought to be able to borrow the difference at quite favourable rates!”) Come on.

Furthermore, CB has been ticking over quite happily for many decades, and it’s a known and quite predictable quantity. Probably it isn’t the thing that got us into trouble, which was not undertaxing but overspending (there are charts to show that). Why create an elaborate set of new mechanisms to claw back something that wasn’t the source of the trouble, especially with the built-in time lag in the reclaim? Why replicate precisely the problems that affliced the infamous Family Tax Credit? Is that competent? The first set of repayments for a full year won’t be due until January 2015, because of the way the tax system works. That’s hardly going to help that AAA rating, is it?

cf2012

First, the article parrots the government’s talk of “savings” when for the people affected it’s effectively a tax allowance not a payout (ie, it’s covered by tax they are have paid, not even counting NI).

Second, the putative gain to the government of 1.5 billion is almost certainly not including the cost of administering it, given the way the tax system works, especially for the self-employed, and allowing for the new need for relationship tracking (who currently shacks up with whom), which is a novelty to the tax system. By contrast, Child Benefit was previously incredibly easy to administer, even easier than making it a plain tax allowance (as it was originally).

Finally, even if the gain were the 1.5 billion claimed, which I seriously doubt (see the similar claims of “3 billion” for the 50% band now abolished) that will be completely wiped out by the 4 billion increase in the DFID budget, which neatly adds insult to the injury of the 5 points in the original article.

Noa

Cuts in public spending are necessary, but this has been ineptly done like most Coalition initiatives.
10% per annum off, across the civil service senior salary overhead would have achieved much more, with far greater public support.

Hexhamgeezer

This money is desperately needed for the extra Bulgarians and Romanians due soon.
Indigenous British families with one earner on £43k+ are of little electoral concern or consequence to LibLabCon.

dalai guevara

Point 5 is most interesting. We note that the winter fuel allowance also appears to run in parallel. Why? ‘Universal’? The better description would be ‘reductio ad absurdum’.

David B

The tax and benefits system is inherently unfair and government interference makes it worse

http://elfnhappiness.blogspot.com/ eeore

The problem with the interference is that each one is only an admission that the government doesn’t have a clue what it is doing.

The_Missing_Think

Hmmm… 5% tax reduction for one’s wealthy chums… microscopic ‘benefit’ reductions for the well off… and plenty of slashings for the f**king plebs.

If only they’d done a few more restraunts, they might have worked it out of their systems by now.

barbie

What Mr O should have done is limit the benefit to two children only to come into effect within six months. This would have been fair to those at the top and those at the bottom with no favourites. We cannot keep providing child benefits for not only British children, but mostly foreign ones, the latter not paying into the pool at all. Why should we keep paying to produce children when we are already over populated, I propose making birth control free as well to stop unwanted pregnancies amongst teenagers, whom we land up keeping for most of their lives. Why they failed to do this I’ll never know, you could say cowardance when it come to the put to.

alexsandr

birth control is free.

TomTom

Yes but in polygamous households it is manifestly unfair if ALL four wives cannot have 4 children and claim Child Benefit

TomTom

only for women – men have to buy condoms and pay VAT

http://elfnhappiness.blogspot.com/ eeore

No they don’t.

alexsandr

they should phase out child benefit and put a bit more on child tax credit. But that should be organised so more is paid for child 1 & 2 and less thereafter

cf2012

There are several techniques Osborne might have used, but since it began as a political stunt, the cost and effort was not taken into account. Just look at the list of new mechanisms and policies that HMRC has had to introduce to do this, including the person who receives the benefit isn’t the one that’s taxed; relationships must be tracked pro-rata accounting for the presence or absence of an individual with the right income level in a household; a completely new scheme whereby one individual can discover another individual’s tax and CB status; a failure to understand how the tax system works especially for the self-employed; and more! Much more!

As Patrick O’Flynn has just pointed out in the Daily Express[http://www.express.co.uk/posts/view/368785/George-Osborne-has-created-an-election-nightmare], the best bit for Tories is that the first full repayment will be due just before the next election. Clearly a winning policy.

MHall

It is totally unfair that a family who has two people earning up to £98k, will get to their child benefit, yet a family with one worker earning £60k will loose there. This government is totally out of touch. They say that it is only fair for people who can afford it to do their bit, yet they cut the highest band of income tax for the rich.

alexsandr

Keep up. this was because the admin in making it on joint incomes would have wiped out the saving. No point making a saving to waste it all on admin.

Ron Todd

I have had a lot of contact with HMRC over the last few years. They are ruthlessly incompotent. The simpler the system they have to administer the better. Watching Cameron on TV agreeing with Marr that people earning £50 000 are ‘far from rich’ that is how far emoved our ruling class is from the rest of us.

Glenn Ludlow

But to be fair the current tax system already does the same. One single earner on £50k pays more income tax than a couple on £25k each.

Also, the highest tax band was (apparently) not producing any net benefit. Tax is intended to be an income for the government to enable it to provide public service functions – not a punishment for being rich, entrepreneurial and successful. What benefit is there to anyone from taking more money from some people if it does not benefit the country?

Daniel Maris

This will have the greatest effect in London where it is not uncommon for people to have mortgages involving payments of £30,000 per annum. If the joint income is £70,000 (60K plus 10K), they might well already be paying something like £23,000 in tax, NI and other dues. Add that to the mortgage and they only have £22,000 per annum to live on. To then take away the child benefit makes a significant impact on them.

alexsandr

that sounds like stupid over borrowing to me. Why do the rest of us have to sibsidise that?

TomTom

Yes well the poor should practise contraception if they cannot afford children or simply give them up for adoption

alexsandr

you can buy houses in accrington for 30k. and borrow in furness.

alexsandr

barrow. – sorry

Hexhamgeezer

no…Borrow fits just fine….

TomTom

Will you move to Accrington ? I wish you would it is just your kind of town

Seasurfer1

Gay Marriage is supposed to eliminate Child Benefit and Child Tax Credit in one blow. But Hush don’t let on about these plans.

TomTom

How…since when don’t gays have children ?

http://elfnhappiness.blogspot.com/ eeore

Because of equality.

Seasurfer1

How can Gays have Children – other than some or other persons. it would be interesting to know the statistics of Adoption, Fostering or IVF related to Gays, after all the huffing and puffing. I bet it is around a few %. But all of this is manifest of the Problem – the breakdown of Families, the breakdown of Natural law and all the social, economic and politico problems which are exacerbating.

http://elfnhappiness.blogspot.com/ eeore

Because the banks are too big to fail.

TomTom

Sorry, £30,000 pa. Is that how cheap mortgages in London are ? It is only a £380,000 loan

Ron Todd

‘only’ £22 000 per annum to live on after the mortgage and tax is paid. I resent having to pay tax so people like that can get child benifit on top.

http://twitter.com/PhilKean1 @PhilKean1

.Raising taxes on struggling middle classes

– who pay many thousands of pounds more in tax than they receive back in tax relief – unlike 60% of the population – is as un-Conservative a measure as it gets.

But what else would we expect from Liberals-posing-as-Tories?
.

Seasurfer1

Another tory vote loser on a big scale. The affect and effects will kick in, in a deroga”tory” way in the Spring of 2014 when some 1 million former child benefit recipients have to pay it back. I understand only 200,000 recipients out of 1.4 million have requested it to stop. These 200,000 are nuts as it will become a tax free loan until it has to be paid back with dire voting support for the tories.
I would say this cock-up will be reversed!
Another own goal along with the definition of Marriage.

cf2012

It’s not just that it’s a “tax free loan”: being registered for CB counts as a credit for NI contributions and affects eligibility for the state pension. That’s intended to account for parents who stay home with their children. I wonder how many of those who opted out realise that (it’s clear on the HMRC web site, but not as clear in the printed material sent out).

By the way, that 200,000 looks suspiciously round, and rather larger than the number claimed just a few days ago, isn’t it?

So much for Cameron simplyfying the Tax System. It is an absolute nightmare to administrate, totally unfair in its progressive nature and will ensure Cameron will not become Prime Minister of a Tory Government next time. There will be a wholesale scalping of tory MPs at the next general election by traditional tory voters. Abstentions will cream off the majority win. When combined with the tory definition of Marriage the tories will get wiped out.

alexsandr

Oh dear Jemina and Jeremy will lose out on the child benefit going into their twust funds now.
Benefits are for the poor and needy. not for reasonably well off.
they should scrap child benefit now and include it in the meas tested tax credit.
taxing people to give them money to tax it away aagain is just idiotic.

http://twitter.com/PhilKean1 @PhilKean1

And what would happen if Jeremy & Jemima’s mummy-wummy and daddy-waddy said – heck, why do we bother to work hard and pay our taxes to subsidise the 60% of the population who are NOT net taxpayers; why don’t we join the 60% and live off the state like the others?
.

alexsandr

well if georgie porgie and wavy davy do their job right and cut waste in the benefits system, then said parents will pay less tax and the stupid money go round ends.

R2-D2

Is there a stupider form of money-go-round or better example of government waste than a system is which they pay my wife £2500 and make me fill a form so that they can take it back from me through taxation?

Fergus Pickering

Because, you fool, they would be MUCH poorer. Surely even you know you can’t send your child to Eton if you are on benefits.

TomTom

Flat Rate Tax is the counterpart to this. The top 1% pay 27% income tax – the bottom 47% take more in Benefits than they pay in taxes. Raising Taxes incessantly on the Middle while reducing Taxes on the very top incomes and boosting Benefits for the Non-Working is PERVERSE

http://elfnhappiness.blogspot.com/ eeore

No it is a reflection that top 1% are using the tax paid to facilitate anti-market activities that ensure they remain the top 1%. It also indicates that the middle class are engaged in non entrepreneurial activities, and concentrating on servicing the anti-market activities.

A collapse in the housing market would go a very long way to correcting this anomaly and encourage new business and growth.

TomTom

Yes but since Double Entry Bookkeeping arrived any fall in house prices leads to a collapse in the Liability Side of the Bank Balance Sheet which carries £ 1 TRILLION in Mortgage Debt – so a 20% adjustment requires an extra £200 billion in Equity to prop up the banks

http://elfnhappiness.blogspot.com/ eeore

We shouldn’t be propping up the banks. If they can’t lend the money they have responsibly that is their business.

Chris Morriss

Why not just get rid of it altogether? Why in this overpopulated country do we give handouts for producing children?

TomTom

Why do we pay pensions to coffin-dodgers and bed-blockers ?

Fergus Pickering

Would a premature baby on life support be a coffin dodger? After all, the little elf hasn’t paid a brass farthing into the state.

TomTom

refer to Chris Morriss

http://elfnhappiness.blogspot.com/ eeore

They will if they survive the incubator.

And their parents and grandparents have paid for them to have that fighting chance.

But don’t let that worry your sadistic pedophile fantasies – join the UN, I’m sure they can find you a job to suit your needs.

Fergus Pickering

Really, fellah. Try to be at least witty. I shall not underline what my point was since it was obviously too abstruse for the likes of you. Pearls before bleeding swine.

http://elfnhappiness.blogspot.com/ eeore

Really we should laugh along with your sadistic fetish?

I don’t think so.

HooksLaw

Well it looks like another little gobshite has survived his own incubation period and come out of its larvae.

http://elfnhappiness.blogspot.com/ eeore

And now i am butterfly.

Fergus Pickering

We need more rich middle-class children and fewer poor lower-class children. Isn’t that right. Therefore… well you can see where I’m going with this, can’t you? The goal must be the total eradication of the working class.

http://elfnhappiness.blogspot.com/ eeore

I wondered how long it would be before Kevin the teenager and his eugenic theories showed his ugly head.

TomTom

Go to Newham and preach the contraceptive gospel…..I bet you’ll be well received in Lewisham, Lambeth, Hackney, Barking where the highest birth rates seem prevalent

TomTom

We abort 200,000 each year and pay for that with taxpayer funds c. £120 million

http://elfnhappiness.blogspot.com/ eeore

Nice try, the benefit is for the child.

And you overlook that that all benefits are taxed.

Colonel Mustard

So, does this mean that a family with one parent earning £55,000 and the other parent not earning will lose out whereas a family where both parents earn £45,000 each won’t? If so that seems barmy.

Daniel Maris

Yes, although commentators rarely refer to that I think it one’s of those feminist shibboleths, so women and men have to be taxed separately even though they are in one household in a legal union.

TomTom

Yes bit Child Benefit is paid TO THE MOTHER and it credits her with NI Stamps for a Pension – this system imposes extra Taxes on the Father unless the Mother opts OUT and loses her Pension NI Credits

http://elfnhappiness.blogspot.com/ eeore

It is barmy anyway. But the politics of it is that it lays the ways for a two child policy – the relevant stories have been placed in the media for a number of years, a university study finds that the rich are more intelligent, rich women are too intelligent to have children etc. They know they can’t go as far as China – not even the Daily Mail would go along with drowning children in a bucket – but by subtle manipulation they can get the message through to the total morons who think this will lead to a cut in taxes, and buy into the whole lifestyle thing (as opposed to having a life).

TomTom

Has no effect….the propagation of children has always been random with lower income groups – look at Speenhamland – it is simply cultural. Potato Famine did not reduce the Irish birthrate so tax changes will only squeeze the MIddle Class more as the whole thrust of police in The West is to force the Bourgeoisie into the Proletariat…..they are all classical Marxist nostrums implemented by classroom ideologues

http://elfnhappiness.blogspot.com/ eeore

Lot’s of words, but without saying anything… C-

TomTom

820,000 families lose Child Benefit from Monday….I do hope none of them are facing trebled Tuition Fees as well !

dalai guevara

Why should I be expected to pay for your kids’ education? I thought you were a free marketeer?

Buy your own, don’t bother me with your financial issues, save up for it from your own money, or go and learn to lay bricks.

http://twitter.com/PerkinWarbeck99 Perkin Warbeck

I agree, btw hope you don’t get sick, I don’t want to have to pay for any treatment or care you might need.

Duke of Earl

Yes, he will pay for his own stuff. And so should you.
Scrap the NHS, end tuition subsidies and lower taxes please.

dalai guevara

Why not? Ever heard of BUPA?

TomTom

BUPA is a bit of a joke

TomTom

If they do reading glasses on BUPA I suggest you read their contracts – perhaps a magnifier would help…it is all there….look at EXCLUSIONS

http://twitter.com/PerkinWarbeck99 Perkin Warbeck

I hope you don’t get really, really ill because if you do, you’ll find BUPA won’t want to know.

TomTom

Are you paying for my children ? Do I even have children ? I see you write as a true Cameroon dedicated to losing elections. Why should I pay for your health care ? Why should I pay for your roads ? Why should I pay for your policing ? By what right do you even live ?

dalai guevara

Listen, the point you were making here is that tuition fees coupled with the loss of child benefit might hit the same section of society twice. Of course I fully understand that – however, you have not fallen short in other places (on the same page) of criticising the approach towards the bottom end of society. Which makes me think that you sit in between: one step from receiving benefits yourself, one step away from benefiting from rent seeking. It is a working/lower middle class position to take, and quite embarassing in terms of the overall message you send. Of course it is true that the lower end of society is ALWAYS supported by the rest of us. It is the general attitude that matters with regard to showing a willingness to do so. In hard times, the bottom end requires the biggest support. It is -as always- as simple as that.

http://elfnhappiness.blogspot.com/ eeore

You are either on Prosac or completely unaware of how the world works.

Correct me if I am wrong but the world is currently engaged in a currency war, caused by ‘the top end of society’ – which should have been allowed to fail – and the benefits being recieved by those at the top to perpetuate their low interest, high credit, false market society is what is causing the debasement of the currency.

Those at the ‘bottom end’ have long been aware of this, one only has to look at the high street to see the pound shops, Primark, and charity shops, all of which were firmly in place before those at the bottom began shelling out to support those at ‘the top’.

TomTom

Excellent response !

dalai guevara

Aha, the rent seeking argument. Of course that’s how it works. I was perhaps misunderstood when I referred to the ‘bottom end’ – what I was talking about was the ‘rock bottom’ end (of course this section is NOT affected by the child benefits changes) that is supported by us as it is economically inactive.

The principle of bailing out derivative/property gamblers by society has (I guess) been discussed ad infinitum. There is little more to say. We have booed at George Osborne at the Olympics, what more could you expect from the British people?

http://elfnhappiness.blogspot.com/ eeore

Uh no.

There is no one who is economically inactive – unless the current vogue for food stamps and welfare cards is adopted.

As for George Osbourne being booed at the para-Olmpics that has much to do with his rejection of IDS’s original plan for welfare reform that would have actually made a difference to the lives of the disabled, and his acceptance of a the previous failed new Labour policy that does not – one needs at this point to look at the failure of charity sector and it’s ideologically driven agenda to address the corruption of this policy, see the case of Fran Lyon.

dalai guevara

Ah yes, the social workers – all socialists and no one ever makes a mistake. The bitter truth is that social workers do a job you and I would not last doing more than 6 weeks, any ‘social workings’ I have witnessed (not personally) appeared quite alright to me. How many horror stories could one find if you worked for a 90,000 strong organisation?

With regard to economic inactivity: you haven’t got a clue, have you?

TomTom

You are in error on every count. You don’t know me and presume to do so. I know how this system functions better than any Cabinet Member, I know more Economics than any Treasury Minister or Official. Stop trying to reduce everything to Self-Interest. I simply think we have whollt Incompetent Politicians and really should invite tenders from elsewhere to run this sad island

dalai guevara

Well, why bash the bottom end then?
- ‘Boosting benefits at the non working end perverse’?
- ‘Stop people having children’ (although that is their only insurance)?

How are these points NOT spoken out of self interest?
You have not responded in any way to my main point.

TomTom

5.2% increase in Benefits when most people have wage freezes or cuts means that NIC Charges must rise on stagnating incomes. It is perverse to reduce the net incomes of those working when they have no ability to increase their gross. It seems illogical that the people who cannot afford to support children have the most and those who work pay so much for their children that they cannot afford to have their own. It is Thorsten Veblen’s Theory of The Leisured Class inverted………..we have a Non-Working Breeder Population and a Drone Worker Class supporting them

dalai guevara

I guess there will be some discussion to be had with IDS who announced a benefit rise cap of 1% in the three coming years. On top of that, child benefit, housing benefit and universal credit are to be frozen for two. Incapacity benefit is to be reassessed, and I am certain that will show similar savings. So how do you get to your figure? These are real term cuts that are looming – for someone already on a permanent ‘beans on toast’ diet it will be hard to stomach…

I agree with you on the general point of child support – for many at the rock bottom end, this is the only way out to boost their dismal basic cover, and the current benefits system appears to incentivise ‘breeding’ as you put it. I cannot for all it’s worth blame the delinquents for taking advantage of this situation, it is the system which perpetuates the status quo and what is worrying is to see is that little appears to be in the pipeline to make the necessary changes.

http://elfnhappiness.blogspot.com/ eeore

The issue is not 5.2% in benefits – benefits are tied to inflation and all that figure represents is that no matter how much internet dating websites, tablets, and pesto is used to drive ‘official’ inflation figures down we are locked in worldwide hyper inflation by the failed notion of globalisation.

HooksLaw

One day you will recognise sarcasm. God knows you deserve enough of it, and be ashamed that you open yourself up to it from a lefty.

Russell

Incorrectly named tuition fees as graduation fees seems more appropriate, even though labour keep puishing the idea that they have to be paid either up front or during attendance at University, and even after graduation only a tiny amount repaid if earnings are over £21,000 per year.
In other words students will be significantly better off than under the ‘old’ Labour fees (which labour introduced and increased during two spells in government), a popint never mentioned by either Labour or the bbc (Or even Sky) whenever the topic arises.

TomTom

Tuition Fees have INCREASED Public Spending – they are front-end loaded. Most will never be repaid. The USA has already reached $1 TRILLION in Student Loans with massive defaults. They are actually a Surtax for Graduates at every level of income whereby a graduate pays higher income tax than a non-graduate at tthe same income level and much more than was borrowed

HooksLaw

Do you want the state to cough up the funds the universities need to do their job? And that job is not just teaching graduates, Indeed that is the last thing they want to do (sarcasm alert!).
As ever you are totally thick.

TomTom

The State DOES cough up the funds. Go and look at how Tuition Fees work and the CASHFLOW implications. You clearly have no idea of how the system functions. Most Tuition Fees will never be repaid and simply written off so some people will be subsidising the Non-Payers from their future taxes. The system is ludicrous. The Us already has 5 million students defaulting and a student loan book of $1 Trillion.

Tuition fees are only repaid after leaving university and only then on the recipient earning a certain sum. Since tuition fee rises are only just coming in it will be some time before payment becomes due.

As and when child benefit becomes due to these people then, if they qualify for it to be reduced, by definition they will be very wealthy and done quite well out of their university education – which without tuition fees some of the poorest in the land would have been paying for out of taxes. As it is, we have seen taxes abolished for the poorest in the land.

TomTom

Dimwit. The Parents of Students get Child Benefit for other Children. If they lose these funds they have less ability to support children at University and more pressure on older children to consider carefully how that affects siblings. The Parents are hit both ways because Student Maintenance Loans are Means-Tested

dalai guevara

For large parts of UK society, University education is now a thing of the past. It’s over. Watch those numbers plummet YOY.

Stiffit

Joyce warns that ‘It is unclear whether the net effect of all this will be to improve the welfare system.’

Even with his eyes shut, it’s perfectly clear this will make thing worse. Or is it a trial run for the abandonment of universal benefit?

TomTom

It is back to the 18th Century where only the Third Estate paid taxes

TomTom

Barbara Castle was so clever to turn Child Tax Allowance into a BENEFIT paid to the Mother, and Brown was a genius to turn BENEFITS into a TAX CREDIT so that the more people take low paid jobs the lower the tax revenues ! Osborne is so dim – clearly he has never learned how the system works and how incentives are created. So now Speccie tell us how many Poles and Slovaks and others can claim Child Benefit for children outside the UK ?

http://elfnhappiness.blogspot.com/ eeore

Next you’ll be asking how many of the supposedly White British male children who supposedly failed Ofsted’s sit, down, shut up and count to ten test were Poles and Slovaks.

TomTom

Not unless they were living in Slovakia or Poland and having tuition from English Schools